WALLA WALLA, Wash., May 18, 2004 (PRIMEZONE) -- Cadence Resources Corporation (OTCBB:CDNR), an energy exploration and development company, today announced its financial results for the second quarter and six months ended March 31, 2004.
For the second quarter 2004, the Company posted revenues of $688,000 far ahead of the $44,000 reported second quarter 2003. This increase came from production of oil from the Company's property in Wilbarger County, Texas, and from gas production from its De Soto Parish property in Louisiana, and its property in Michigan. The first five wells at the Logansport site began producing and the sixth, seventh and eighth wells were completed in the quarter accounting for a substantial portion of the increase. In addition, the rise in energy prices has strengthened the Company's top line growth. During second quarter 2003, revenues came from the sale of oil production from the Company's oil wells in Texas only.
The operating loss for the second quarter ended March 31, 2004 shrank to $138,000 from a loss of $271,000 in the same period prior year. The net loss was $141,000 in the second quarter of 2004, or $0.02 per fully diluted share, improved from the net loss of $383,000, or $0.04 per share, in quarter ended March 31, 2003.
Howard M. Crosby, president of Cadence Resources, said, "We are very happy with the continued rise in our revenues, which were $130,000 higher than in our first quarter. As our ability to increase production through the successful completion of wells grows, so will our revenues. We are also confident that the recent increases in the price of energy will continue to benefit us. Many analysts say that OPEC itself may have trouble bringing prices down through increased production because demand is so great."
He added, "We are studying methods to enhance the production in De Soto Parish by completing or re-completing indicated pay zones in our wells that we have not yet exploited. All of our five producing wells as of December 31, 2003, were drilled to Cotton Valley formation to depths of in excess of 10,000 feet. During the quarter ended March 31, 2004, we drilled two wells to the shallower Hosston sand formation, which lies between 6,450 and 8,950 feet. In light of the rate of production from the Hosston formation wells, our most recent well has been drilled to the Cotton Valley. We are in active discussions with our joint venture partner in determining our future drilling plans in this area."
He also said, "In addition to the developments on the Logansport, Louisiana project, we completed our leasing program in the Anadarko Basin in Kansas with over 26,000 acres now under lease. We will commence a 3-D seismic program in June and are targeting oil-bearing formations to depths of about 4,200 feet."
For the half year ended March 31, 2004, Cadence reported revenues of $1.2 million well ahead of the $77,000 reported in the first half of fiscal 2003. The operating loss for the first half of fiscal 2004 grew to $515,000 from $471,000 in the same period prior year. However, the net loss of $517,000, or $0.06 per fully diluted share, in the first six months of fiscal 2004 was less than the $627,000 loss, or $0.07 per fully diluted share, in the same period of 2003.
This release contains forward-looking statements that involve substantial risks and uncertainties. Investors and prospective investors in our common stock can identify these statements by forward-looking words such as "may," "will," "expect," "intend," "anticipate," believe," "estimate," "continue" and other similar words. Statements that contain these words should be read carefully because they discuss our future expectations, make projections of our future results of operations or of our financial condition or state other "forward-looking" information.
Three Months Ended Six Months Ended March 31, March 31, ---------------------- ---------------------- 2004 2003 2004 2003 (Unaudited) (Unaudited) ---------------------- ---------------------- REVENUES $ 688,368 $ 44,449 $1,247,752 $ 77,825 ---------- ---------- ---------- ---------- GENERAL AND ADMINISTRATIVE EXPENSES Depreciation, depletion and amortization 309,173 8,496 542,284 17,131 Officers' and directors' compensation 35,000 173,477 90,000 218,477 Consulting 82,100 21,425 140,513 99,655 Professional fees 150,389 41,393 440,436 49,428 Oil and gas lease expenses 114,126 39,095 223,512 59,447 Oil and gas consulting 27,500 - 42,500 - Oil and gas productions costs 33,171 - 72,650 - Exploration and drilling 12,000 - 12,000 - Lease operating expenses 2,410 5,663 3,658 42,179 General and administrative 60,223 26,222 195,203 62,425 ---------- ---------- ---------- ---------- Total expenses 826,092 315,771 1,762,756 548,742 ---------- ---------- ---------- ---------- OPERATING LOSS (137,724) (271,322) (515,004) (470,917) ---------- ---------- ---------- ---------- OTHER INCOME (EXPENSES) Interest income 213 46 4,193 126 Interest expense (8,132) (81,762) (10,313) (83,001) Partnership loss - (159) - (8,468) Refund of production taxes 5,155 - 5,155 - Gain on debt forgiveness - - - - Gain (loss) on disposition and impairment of assets (720) (29,969) (720) (64,592) ---------- ---------- ---------- ---------- Total other income (expense) (3,484) (111,844) (1,685) (155,935) ---------- ---------- ---------- ---------- LOSS BEFORE TAXES (141,208) (383,166) (516,689) (626,852) INCOME TAX BENEFIT - - - - ---------- ---------- ---------- ---------- LOSS FROM CONTINUING OPERATIONS (141,208) (383,166) (516,689) (626,852) GAIN (LOSS) FROM DISCONTINUED OPERATIONS Gain from mining operations (net of income taxes) - - - - ---------- ---------- ---------- ---------- NET INCOME (LOSS) (141,208) (383,166) (516,689) (626,852) OTHER COMPREHENSIVE INCOME (LOSS) Unrealized gain (loss) on market value of Investments (103,299) 32,655 (210,593) 41,332 ---------- ---------- ---------- ---------- COMPREHENSIVE INCOME (LOSS) $ (244,507) $ (350,511) $ (727,282) $ (585,520) ========== ========== ========== ========== NET INCOME (LOSS) PER COMMON SHARE BASIC AND DILUTED Net loss from continuing operations $ (0.02) $ (0.04) $ (0.06) $ (0.07) Net income (loss) from discontinued operations nil nil nil nil ---------- ---------- ---------- ---------- NET INCOME (LOSS) PER COMMON SHARE $ (0.02) $ (0.04) $ (0.06) $ (0.07) ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED 12,645,330 9,037,193 12,630,615 8,721,129 ========== ========== ========== ========== CADENCE RESOURCES CORPORATION BALANCE SHEETS March 31, 2004 September 30, ------------------------- (Unaudited) 2003 2002 ----------- ----------- ----------- ASSETS CURRENT ASSETS Cash $ 485,543 $ 3,619,345 $ 40,011 Oil & gas revenue receivable 385,640 84,575 26,123 Receivable from working interest owners 12,873 12,873 16,037 Notes receivable 3,720 3,720 13,078 Prepaid expenses 137,225 5,925 27,500 Other current assets 27,425 425 431 ----------- ----------- ----------- TOTAL CURRENT ASSETS 1,052,426 3,726,863 123,180 ----------- ----------- ----------- OIL AND GAS PROPERTIES, USING SUCCESSFUL EFFORTS ACCOUNTING Proved properties 638,917 590,747 48,694 Unproved properties 3,785,555 833,836 78,997 Wells and related equipment and facilities 474,312 202,886 67,374 Support equipment and facilities 331,858 151,963 105,108 Prepaid mineral leases 540,013 395,973 177,177 Less accumulated depreciation, depletion, amortization and impairment (604,885) (61,611) (4,312) ----------- ----------- ----------- TOTAL OIL AND GAS PROPERTIES 5,165,770 2,113,794 473,038 ----------- ----------- ----------- PROPERTY AND EQUIPMENT Furniture and equipment 4,226 1,660 1,440 Less accumulated depreciation (1,625) (1,451) (1,440) ----------- ----------- ----------- TOTAL PROPERTY AND EQUIPMENT 2,601 209 - ----------- ----------- ----------- OTHER ASSETS Investments 185,092 394,454 448,793 ----------- ----------- ----------- NONCURRENT ASSETS Net assets of discontinued operations 246,757 246,757 246,757 ----------- ----------- ----------- TOTAL ASSETS $ 6,652,646 $ 6,482,077 $ 1,291,768 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 633,774 $ 584,866 $ 119,923 Revenue distribution payable 136,795 68,929 14,835 Payable to related party - 550,000 2,500 Deferred working interest - - 22,184 Interest payable 13,054 15,752 - Accrued compensation 8,165 94,920 66,261 Notes payable - related parties 510,000 460,000 - Notes Payable 1,000,000 - - ----------- ----------- ----------- TOTAL CURRENT LIABILITIES 2,301,788 1,774,467 225,703 ----------- ----------- ----------- REDEEMABLE PREFERRED STOCK 59,925 59,925 - ----------- ----------- ----------- STOCKHOLDERS' EQUITY Common stock, $.01 par value; 100,000,000 shares authorized, 12,673,800, 12,512,827 and 6,866,210 shares issued and outstanding, Respectively 126,738 125,128 68,662 Additional paid-in capital 18,711,738 18,343,422 13,291,965 Stock options 1,210,704 1,210,704 626,790 Stock warrants 51,375 51,375 233,334 Accumulated deficit (15,379,773) (14,863,687) (12,906,132) Accumulated other comprehensive income (loss) (429,849) (219,257) (248,554) TOTAL STOCKHOLDERS' EQUITY 4,290,933 4,647,685 1,066,065 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,652,646 $ 6,482,077 $ 1,291,768 =========== =========== ===========